Correlation Between Thrivent Small and Precious Metals

Can any of the company-specific risk be diversified away by investing in both Thrivent Small and Precious Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Thrivent Small and Precious Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Thrivent Small Cap and Precious Metals And, you can compare the effects of market volatilities on Thrivent Small and Precious Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Thrivent Small with a short position of Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thrivent Small and Precious Metals.

Diversification Opportunities for Thrivent Small and Precious Metals

-0.15

Correlation Coefficient

Thrivent Small  Precious Metals

Good diversification

The 3 months correlation between Thrivent and Precious is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Thrivent Small Cap and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And and Thrivent Small is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Thrivent Small Cap are associated (or correlated) with Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Thrivent Small i.e., Thrivent Small and Precious Metals go up and down completely randomly.

Pair Corralation between Thrivent Small and Precious Metals

Assuming the 90 days horizon Thrivent Small Cap is expected to under-perform the Precious Metals. But the mutual fund apears to be less risky and, when comparing its historical volatility, Thrivent Small Cap is 1.65 times less risky than Precious Metals. The mutual fund trades about -0.26 of its potential returns per unit of risk. The Precious Metals And is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,117  in Precious Metals And on December 4, 2024 and sell it today you would earn a total of  173.00  from holding Precious Metals And or generate 8.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Thrivent Small Cap  vs.  Precious Metals And

Thrivent Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thrivent Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Precious Metals And

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Precious Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Thrivent Small and Precious Metals

The main advantage of trading using opposite Thrivent Small and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thrivent Small position performs unexpectedly, Precious Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Precious Metals will offset losses from the drop in Precious Metals' long position.

The idea behind Thrivent Small Cap and Precious Metals And pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.